Most internet marketers hit a certain phase as they are starting out, one which can quickly spiral out of control: domain hoarding.
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This is where you end up buying domain after domain, until you end up with more domains than you know what to do with.
If you manage to get a grip on this potential problem, there are things you can do with your surplus of domains. Often people either try to sell the domains, create a basic site and flip them, or simply let the domains expire.
Another option is domain parking.
How does domain parking work?
According to Wikipedia:
“Domain parking refers to the registration of an internet domain name without that domain being associated with any services such as e-mail or a website.”
In essence there should be nothing there, but most if not all domain registrars will add advertisements to a parked domain.
These adverts when clicked earn you a small fee as a reward for allowing your domain to host said advertising.
Your domain is basically turned into an online billboard.
This might not seem like a big of a deal, but with the right setup and investment, it’s possible to turn a reasonable profit from parked domains. Plus they require little to no work once set up – true passive income.
Quantity over quality
If you’re keen to look into domain parking as a revenue source, the first thing you will need to know is that for this method, quantity is just as important, if not more so, than quality.
This is because like with most advertisements on the internet, the more traffic you have the more chance you have of generating the all-important clicks, so the more domains you have parked, the higher the possibility of getting some that have a high traffic flow.
It’s not uncommon for someone involved in domain parking to have hundreds of domains. In fact some services like Sedo’s Domain Parking for Professionals requires you to have a minimum of 500 domains!
The most important thing about choosing a domain is to find those domains that can generate traffic without input from you.
This is because all the domain parking services have rules that prevent you from sending traffic to the sites via SEO, PPC etc.
In fact they can be quite ruthless when it comes to traffic monitoring and if it looks like you’re trying to game the system they will suspend or close your account.
When choosing domains to use for parking, there are 3 broad types: brand new, misspelled, and expired domains.
Brand new domains
This type of domain refers to new domains that are spelled correctly but may offer potential for traffic. In general these should be avoided or at least examined in detail to make sure they are worth the purchase, though at approx. $10 for a domain, it’s sometimes worth the risk.
This type of domain is one where you obtain a domain similar to another in the hopes that people will type in the incorrect domain name and end up on your site instead.
The most common way to do this is to look for plurals, e.g. instead of bluewidget.com, register bluewidgets.com.
There are some legal areas that you may struggle with here, especially if you start abusing brand names and copyrights this way, but it does offer the opportunity to catch traffic from popular sites.
A safer alternative is to pick up domains that have expired. These types of domains usually have had some traffic in the past that you can leverage.
Basically you’re just trying to make sure you’re not buying a site that only had 3 visitors per year, as you won’t make a cent that way.
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If you’ve ever examined a domain to buy or one for a PBN, then it’s basically the same criteria.
What sort of domains should you buy?
This is the difficult question, but in general they should be .coms or .orgs and should focus on a popular niche.
This would be the one time where you should even consider broader niches than you are perhaps used to with affiliate marketing, though as with anything online testing will be required.
Looking to current or potential fads and trends is definitely a decent angle to take, though these have a tendency to not be evergreen and run out of steam after a while.
Domain parking requires a lot of forethought and examination of a niche, from the keywords used to the general market, as well as potential traffic as everything focuses purely on the domain name itself as you have no other way to market the domain.
Exact Match Domains
Google has penalised exact match domains (EMD), but from a domain parking point of view it isn’t a problem. Parked domains won’t appear in an internet search anyway, so if the EMD looks like a good domain then pick it up!
Services you can use
In order to get adverts to appear on your site, you will need to use a domain parking service.
Redirect is actually quite an interesting one as instead of serving adverts, it geo-locates the visitor and redirects them to a targeted advertiser.
Problems with parking services
The main issue with parking services from your point of view is the inability of sending traffic to the domain.
It’s understandable why they would do this; after all it’s easy to send a ton of untargeted traffic at a domain which will increase any CPM (Cost Per Thousand) earnings.
As well as that the actual earnings per click for most services is mere cents.
How then can you increase earnings?
One option is to do your homework and choose the right service that provides the best rates.
Other than that you could always create a faux parked domain. This involves sticking up a basic web page with related adverts on it.
Of course this is more work to create and maintain, especially if you have hundreds of domains, but it does allow you to have a lot more control and to choose advertisers (or affiliate schemes) that have fewer rules in force.
Domain parking isn’t for everyone. There’s a level of investment required that most people balk at (easily $1,000 – $5,000 or more per year).
As well as that, finding domains that can generate traffic without SEO and therefore income is an ongoing project; especially as fads and trends change over time (how much traffic would Olympics2012.com get right now?).
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That being said, if you are skillful in your selection as well as use a scatter shot method (it’s odd to use both of those at the same time but there you go), then there is a potential to make your costs back and then some.